Stephen Rees's blog

Thoughts about the relationships between transport and the urban area it serves

The real cost of privatisation

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This story comes from Britain, one of the pioneers of the Public Finance Initiative or “P3” as they are called here. The idea was that the private sector was so much more efficient than public sector organizations (seen as blundering bureaucrats) that bringing in companies to run public services would save taxpayers money. Well, on the whole, it cannot be said to have been a happy experience – although there is a pleasing symmetry to note that it is the public sector that is taking the blame. Because, it is said, they don’t know how to award contracts.

Just to whet you appetite here is the first para

The huge cost to the taxpayer of Labour’s commitment to the private finance initiative since it came to power a decade ago is revealed by the Treasury in a report by MPs published today. It shows that Gordon Brown has committed future governments to pay back £170bn by 2032 to banks, investors and private entrepreneurs for more than 800 schemes for new hospitals, schools and prisons.

Now in case you wonder why I am bringing this to your attention you should be aware that any project over $20m in BC gets the once over for a potential P3 – including municipal projects. And Jim Flaherty thinks the pension funds should help him to repair our crumbling infrastructure

Written by Stephen Rees

November 26, 2007 at 5:02 pm

Posted in privatisation

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